US and Reciprocal Tariffs, Global Tax and More

Background

Given the ever shifting direction of US trade policy and the speed at which policies are changing with respect to the implementation of tariffs, is it crucial to keep updated on tariffs, global tax and more.

The Week in Summary

Tariff Implementations 

• President Trump has now imposed 10% import tariff on all Chinese goods 
• China retaliation measures have been imposed on US origin goods as of 10th February

On Monday 10th February, President Trump signed a proclamation imposing a 25% tariff on all steel and aluminium imports, irrespective of the country of origin, due to be implemented on March 12th. While tariffs have been in place for both steel and aluminum, certain countries, including the UK and EU, were previously exempted. Significantly, with these new wider measures the 25% tariff will apply to all 3rd countries including the EU.

Additionally, on Thursday 13 February President Trump signed a Presidential Memorandum introducing the “Fair and Reciprocal Plan”. This Plan instructs the Trump Administration to investigate and produce a report detailing proposed remedies to counter non-reciprocal trading arrangements with trading partners. In the context of this memorandum, “reciprocal tariffs” considers the idea of the US applying tariffs on 3rd country goods which matches tariffs which those countries impose on US goods. 

As an example of this in practice, the White House Fact Sheet which accompanied this memorandum specifically calls out the fact that the EU imposes a 10% tariff on imported cars, yet the US only imposes a 2.5% tariff. Interestingly, the text of the memorandum directly calls out value-added tax imposed on US businesses as a non-reciprocal trade relationship which is to be examined.

Irish Reaction

In response to the implementation of tariff measures on China, and the threat of tariffs being imposed on the EU, the Irish Government has brought forward proposals for two new advisory bodies. 

The first proposal provides for the establishment of a new US-based body that will be specifically tasked with further strengthening US-Irish relations. It would be known as the Strategic Economic Advisory Panel, and would advise on how to deal with potential policy changes brought about by the Trump administration.

The plan is for the panel to be made up of influential professionals drawn from a range of business sectors operating in the United States.

Minister Simon Harris is also set to ask Cabinet to approve the immediate establishment of a separate Consultative Group on International Trade Policy to facilitate dialogue with key stakeholders engaged in international trade. This group is to meet at least every eight weeks, and it will provide advice on dealing with trade challenges and opportunities.

EU Commentary

European leaders have raised concerns over President Trump’s recent tariff threats, warning of potential  economic harm to EU member states. Spanish Economy Minister Carlos Cuerpo stressed the need for a united EU response to protect businesses and ensure fair competition. 

At a recent summit, European Commission President Ursula von der Leyen acknowledged the growing uncertainty and affirmed the EU’s readiness to defend itself. “When targeted unfairly or arbitrarily, the European Union will respond firmly,” she stated. Discussions also focused on maintaining transatlantic unity while pursuing diplomatic solutions to prevent escalating trade tensions. 

French foreign minister Jean-Noël Barrot urged the European Commission to take decisive action, arguing that the EU must be prepared to implement retaliatory measures if necessary. His stance reflects a broader consensus among EU leaders to stand firm against unjustified economic actions that could harm European businesses and consumers.

More recently, on 10 February 2025, the EU Commission issued an official statement regarding potential US tariffs on EU steel and aluminium. The Commission emphasised that it will not respond to any announcements without written clarification and reiterated that it sees no justification for the imposition of tariffs on its exports. Echoing the sentiments of the foreign ministers of EU member states, the Commission affirmed that any future actions will aim to protect the interests of European businesses, workers, and consumers against unjustified measures.

UK Position

In contrast to the EU, President Trump has made broadly positive comments related to the UK indicating possible UK tariffs could be “worked out”. This has led to a muted response from the UK with no direct indications that a trade war could break out between the two nations.